Yahoo Wins Support of Third Largest Shareholder, Cedes Three Board Seats to Icahn

News, 22 July 2008

SUNNYVALE, California: There's good news and bad at the beleaguered internet portal. Trouble is, the Yang Gang can't be certain which is which!

After a dramatic weekend of midnight oil burning, Yahoo's board received the backing of Legg Mason Capital Management (its third largest shareholder after Capital Group and corporate raider Carl Icahn), with LMCM pledging support at the firm's annual meeting on August 1 when a motion to remove its entire board is slated by Icahn.

Or was.

Instead the deal struck over the weekend will see Icahn joining the Yahoo board, which will be enlarged to eleven members - although current director Robert Kotick will step down.

The remaining two seats will be filled from a list of nine Icahn-nominated candidates, among them former AOL chief executive Jonathan Miller.

Only those who believe Elvis is alive, well and a grandfather living in Boise, Idaho think it coincidence that LMCM's pledge occurred just seventy-two hours before Yahoo's shock announcement.

Bloomberg.com sees the deal as "a victory of sorts" for Jerry Yang, Yahoo's founder/ceo whom Icahn sought to oust for nixing a series of takeover bids by Microsoft.

Yang keeps his job, at the same time ceding to three voices for change around the boardroom table.

The surprise announcement was accompanied by high decibel lip-smacking as the moneymen's laptops ran hot calculating the the number of trailing zeroes that might accompany a renewed bid by Microsoft.

"Icahn clearly is agitating for change at Yahoo, this guy is a deal person," salivated First Source Bank portfolio manager Michael Shinnick in a interview with Bloomberg Television.

"With him on the board they're going to be much more receptive and reasoned in terms of considering a Microsoft offer."

Data sourced from Business Week (online) and Bloomberg.com; additional content by WARC staff

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